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Tensions between Ukraine and Russia are Causing High Market Volatility


The Russia-Ukraine conflict has been at the forefront of Western media outlets for several weeks now. As suspected, investors around the world appear to be stuck in limbo with Putin’s mixed messaging creating a nerve-wracking trading environment while presenting possible opportunities for optimists considering trading CFDs. The idea of remaining optimistic through such volatility is something that most experienced investors are aware of. Zach Abrams, a CFP and manager of wealth management at Capital Advisors Ltd. reiterates this by highlighting that during periods of extreme volatility, long-term market returns rely on the following: dividend yields, valuations and earnings growth. To properly understand the market volatility and investor speculation, it is important to understand what’s going on in Eastern Europe and the roads that led us there.

It’s no secret that the majority of the leaders in the West are convinced that Putin plans on invading Ukraine. Leaders such as Joe Biden, Boris Johnson and many other NATO members are sending troops and supplies to reinforce Ukraine’s borders to prepare them for a worst-case-scenario Russian Invasion, believing an attack is imminent. Satellite footage of Ukraine’s borders support this notion, showing masses of Russian troops and inventory been deployed to military strategic places across the borders of Belarus and Ukraine, with the most recent reports showing that Russia have moved into Russian-friendly separatist held provinces of Ukraine. These moves add to the ambiguity of what’s happening in the region, with Putin publicly saying he want to pursue a diplomatic path, creating further market speculation.

Unrest in the East is nothing new, since the fall of the Soviet Union in 1991. Moscow and those in power have been concerned with their former nations such as Ukraine, Lithuania and Estonia aligning themselves with the West. Tensions began to build again in November 2013, with protests in the capital city of Kyiv in response to the Ukrainian President Viktor Yanukovych’s decision to reject becoming more economically integrated with the EU. A violent crackdown by the state security forces lead to further unrest, causing him to flee the country in February of the following year. By March, Russia intervened, annexing Crimea from Ukraine and deployed an established a strong military presence on the peninsula, leading us to the situation the World finds itself in today.

The good news is that nothing is set in stone and both sides of the isle are open about desiring a diplomatic solution to the chaos. Neither side can risk an all-out nuclear war and so far, these shows of force appear to be just that: a show. Whether Putin is just flexing his military muscles or intends on war, the markets will be watching, as we continue our everyday lives.